How Will Trump’s Tariffs Affect Health Care?

Friday, April 13, 2018

About 12 percent of medical devices and supplies imported into the U.S. (worth approximately $3 billion) come from China. The 25 percent tariff proposed by the Trump administration on Chinese products and ingredients – which includes pacemakers, artificial joints, and defibrillators – could cost the medical-device industry up to $1.5 billion annually.

It is less clear whether the tariff would have a substantial effect on the drug industry, even though China is a leading exporter of raw pharmaceutical ingredients, such as insulin, epinephrine, and blood products. Many of these ingredients also are manufactured in countries unaffected by the tariffs, like India, and typically account for only a small fraction of the total cost of branded drugs’ production.

One corner of the drug industry is sounding an alarm, however. “We are concerned that the proposed tariffs may lead to increased costs of manufacturing for generics and biosimilars and thus higher prescription drug prices for patients in the U.S.,” said Jeffrey K. Francer, senior vice president and general counsel at the Association for Accessible Medicines, which represents generic drug companies.